On the Right Track Towards Retail Theft Prevention?

According to the 2015 Retail Theft Survey published by the National Retail Federation (NRF), retail shrink averaged 1.38% of sales, resulting in $44 billion in losses.  The increase in repeat shoplifters, employee theft, and other fraudulent activities may seem overwhelming. However, there are solutions to help retailers better manage inventory shrink.

Download our infographic to get started on the right track towards retail theft prevention.

 

About CONTROLTEK

Since 1976, we have been delivering unique products and solutions to the cash-transfer and asset protection industries to address specific business challenges.  Our company has grown steadily based on the quality of our products and the quality of our service. Our commitment to research and development is combined with a willingness to listen to the people who everyday depend on our products. By relentlessly researching and introducing new materials and new features, we are proud to say we have impacted the way assets are secured globally.

With experience gained through research and collaboration within the financial and retail sectors, we actively charted a course over the past several years to bring added value, new thinking and viable approaches, addressing the dilemmas and challenges that frustrate business professionals today.

During this process, we realigned our resources within CONTROLTEK, creating three silos (ISS, ISP and IVS).  This enables us to focus more specifically on the needs of our Clients and their specific challenges they face on a daily basis.  Additionally, CONTROLTEK has aligned itself with Global partners to provide holistic solutions that solve today’s challenges.   Whatever the application, CONTROLTEK resources stand by ready to deliver results that enable commerce and effectively secure assets at financial institutions and leading retailers across the globe.

EAS made EASy

No one can argue we’re in a time when technology seems to be moving faster than we can keep up with it.  That may be why EAS (Electronic Article Surveillance) technology seems to be elusive and confusing when it comes to its evolution and modern capabilities. Well…it isn’t and doesn’t have to be. This article will attempt to break down very succinctly the evolution of EAS without too much “geek speak,” and will give the LP professional a quick, useful explanation of how this technology has advanced in an effort to support retail’s ever-changing needs.

If you’re a person who finds the need to be lost in a wonderland of amorphous metals and magnetic saturation values, STOP READING NOW, this ain’t for you!

In The Beginning

The history of EAS began in the ‘60s.  Three influential pioneers recognized the need for this type of technology. They were Arthur J. Minasy, Ronald G. Assaf, and Albert E. “Ted” Wolf.  The technology was needed, but not only in the retail space.  Wolf was originally developing and utilizing EAS technology for protection of books in libraries.  However, due to the expanding retail market and the foothold both Minasy and Assaf were gaining there, he quickly followed suit.  By the early to mid ‘70s, the three were in a proverbial foot race to conquer markets and make fortunes. A lot happened over the next 20-30 years regarding company spin-offs, legal battles, technology shifts & development, and EAS’ overall use.  The technology was found very useful, but its application needed tweaking multiple times on many fronts to meet the needs of retail.  This challenge, coupled with competition and pressure to have the best technology, got quite precarious to say the least.

Amorphous Metals & Magnetic Saturation Values

Alright, this is it! This will be all you get when it comes to “geek speak.” Presently, there are essentially four technologies or systems utilized in the EAS world.  These systems are RF (Radio-frequency) Systems, AM (Acousto-Magnetic) Systems, EM (Electro-Magnetic) Systems and Microwave Systems.  There are combo systems such as RFID (Radio-frequency identification) whereby the tags hold information and the radio frequency tracks the individual tags.  Each technology utilizes electro-magnetic energy and therefore, the signals can interfere with other electronic devices. While all utilize electro-magnetic energy, that is pretty much where the similarities end.  Over the course of time, each technology has been employed in various applications. Even the designs of EAS tags have changed as various learnings occurred.  With that said, each technology has both demonstrated value and some challenges.  Store layouts, types of merchandise, customer service, and different business models play significant roles in the technology employed.  Each technology should be researched, and advice from industry professionals should be sought in order to ensure all needs will be met with whichever technology is chosen.

Source-Tagging: The Final Link

Technology to the side, there has been other critical “tipping points” for EAS in its history.  The most important has been the drive for “source-tagging”.  This is applying the EAS device at the manufacturer or at the retailer’s own distribution center rather than at the store.  If you’ve been in retail for any length of time you know that for every breath a store employee takes, there is an equation for how that breath impacts the labor budget for that store.  Early EAS users were applying tags in merchandise receiving rooms, but operators quickly realized this was a labor drain that detracted from a sales floor presence and customer service.

In the early ‘90’s source-tagging began taking off, but not without its own challenges.  EAS manufacturers were developing their latest and greatest systems while also attempting to rollout source-tagging.   Among the many challenges, applying EAS tags to merchandise had to be precise, and bulky deactivation devices used for removing the tags at the POS affected customer wait times and overall shopping experiences. However, the EAS suppliers who slowed down, embraced these challenges, and developed a strong R&D function that involved retailers at the onset, were the ones that have realized longevity in the industry and have proven they are “partners” in reducing shrink and increasing bottom line profits.

CONTROLTEK is one of those partners. In fact, CONTROLTEK has not only developed ControlSpan™, an inventory tracking system that utilizes affordable RFID technology within the EAS system, but can handle all source-tagging needs as well. Visit Controltekusa.com to review their products in the EAS arena and see how they can partner with you to meet your EAS needs.

About CONTROLTEK

Since 1976, we have been delivering unique products and solutions to the cash-transfer and asset protection industries to address specific business challenges.  Our company has grown steadily based on the quality of our products and the quality of our service. Our commitment to research and development is combined with a willingness to listen to the people who everyday depend on our products. By relentlessly researching and introducing new materials and new features, we are proud to say we have impacted the way assets are secured globally.

With experience gained through research and collaboration within the financial and retail sectors, we actively charted a course over the past several years to bring added value, new thinking and viable approaches, addressing the dilemmas and challenges that frustrate business professionals today.

During this process, we realigned our resources within CONTROLTEK, creating three silos (ISS, ISP and IVS).  This enables us to focus more specifically on the needs of our Clients and their specific challenges they face on a daily basis.  Additionally, CONTROLTEK has aligned itself with Global partners to provide holistic solutions that solve today’s challenges.   Whatever the application, CONTROLTEK resources stand by ready to deliver results that enable commerce and effectively secure assets at financial institutions and leading retailers across the globe.

The Evolution of the Loss Prevention Executive

Never has it been more important than now for loss prevention professionals to recognize that they are in the “practice” of a business profession.  Many Loss Prevention executives believe their profession is not unlike the practice of accounting or law, in that when regulations, technology, or laws change, Loss Prevention’s strategy and approach must also change.  Effective LP executives have embraced the evolution of the profession and have recognized the importance of creating departments with capabilities of “traditional” LP expertise that is coupled with “non-traditional” business acumen.

There was a time when “traditional” skill sets of training in loss prevention tactics, interviewing dishonest employees or working alongside law enforcement, carried a certain mystique that seemed to be all an LP professional needed to know.  Operators were impressed and thankful when LP would show up, conduct an interview and take someone out in handcuffs.  But it didn’t take long in the evolution of the profession for executives to realize a company couldn’t arrest its way out of shrink.  The resulting revelation was never more glaring: Either add value via “non-traditional” Loss Prevention methods or become obsolete.

Skills associated with merchandising and product assortment, logistics and freight flow, and accounting and profit margins, were making their way into the LP professional’s wheelhouse.  It became important for the LP professional to understand non- traditional “shrink influencers,” like plan-o-gram integrity, for instance.  For example, if merchandise was received at a store, but the plan-o-gram was never set, it was likely that the merchandise would sit in a receiving room for a very long time. Other merchandise would continue piling up and eventually become susceptible to markdowns, damage, loss or theft.  In this scenario, the merchandise simply had nowhere to go on the sales floor and the result was lost sales, margin impact, and ultimately, a diminished experience for customers.  As a result, some company executives had come to expect their LP teams to possess the skills necessary to assess a sales floor and the operational health of a store, and determine which shrink-inducing deficiencies were operational failures and which were a result of theft.  In these companies, it is expected that the LP professional would then make sound recommendations on how to mitigate the identified operational failures and how to mitigate the theft concerns.

In this environment, LP professionals realized the need to see the added value in their relationships with vendor partners. After all, they too were seeing the need to enhance value beyond their traditional roles of just selling theft-reducing tools.  For example, a recent whitepaper published by the Calibration Group entitled, Stock-On-Hand: The Retail Problem that’s 7 Times Greater than ORC”, reveals how RFID technology can help manage inventory, thereby increasing sales while simultaneously reducing shrink. Since RFID technology has become more affordable over the last couple of years, this solution is one in which successful LP executives are implementing in order to demonstrate their added value. Other tools, such as EAS (electronic article surveillance) also assist with driving sales while reducing shrink, and now these two technologies have merged to create EAS with RFID capabilities.  Now, would-be thieves tend to look for “softer” targets who don’t employ EAS or RFID technologies and because of this, Stock-on-Hand (SOH) counts for high-theft items are higher, stores utilizing these technologies look more aesthetically pleasing, and customers are finding a larger assortment of merchandise.  This is resulting in improved customer satisfaction, repeat business, and increased sales.  Again, operators are seeing the added value of their relationships with Loss Prevention and the vendor partners who service their expertise.

To summarize, one highly experienced Loss Prevention executive stated, “Today’s LP professionals have to develop skill sets to walk a sales floor, observe its condition pertaining to things like out of stocks, plan-o-gram integrity and recovery, and determine the operational failures or theft-causing weaknesses needing remedied.  Once assessed, they have to have the business acumen to develop plans of action on both the operational side and the theft side of the equation.  For operational failures, the LP professionals have to have the credibility to communicate with district and regional operators. Then, they need to be prepared to train store teams on improving store conditions and operations, and create a metrics-driven approach to improvement.”

About CONTROLTEK

Since 1976, we have been delivering unique products and solutions to the cash-transfer and asset protection industries to address specific business challenges.  Our company has grown steadily based on the quality of our products and the quality of our service. Our commitment to research and development is combined with a willingness to listen to the people who everyday depend on our products. By relentlessly researching and introducing new materials and new features, we are proud to say we have impacted the way assets are secured globally.

With experience gained through research and collaboration within the financial and retail sectors, we actively charted a course over the past several years to bring added value, new thinking and viable approaches, addressing the dilemmas and challenges that frustrate business professionals today.

During this process, we realigned our resources within CONTROLTEK, creating three silos (ISS, ISP and IVS).  This enables us to focus more specifically on the needs of our Clients and their specific challenges they face on a daily basis.  Additionally, CONTROLTEK has aligned itself with Global partners to provide holistic solutions that solve today’s challenges.   Whatever the application, CONTROLTEK resources stand by ready to deliver results that enable commerce and effectively secure assets at financial institutions and leading retailers across the globe.

The 3 Most Commonly Overlooked Key Elements of Inventory Management

Perhaps you’ve met this person, or maybe you are him or her. It’s the person whose desktop is immaculate – with everything lined up just so – but as soon as you open one of their drawers, you see a bunch of things crammed in there haphazardly, without any discernable system. Sure, the desk looks great to the boss walking by, but when it comes time for this person to unearth that important financial file from a few months back … good luck with that. Throwing things in drawers to project an appearance of organization is something with which we can all relate. Simply put, it’s easier to straighten things on top of a desk than to organize the contents within.

“Some stores overlook the disorganization that’s unseen in favor of offering a great outward appearance.”

When it comes to retail stores, the outward appearance of the store is the equivalent of the top of the desk, while the inventory is the equivalent of what’s in the drawers. And just like people, some stores are likely to overlook the disorganization that’s unseen in favor of offering a great outward appearance.

Stores without strong inventory management processes are the retail equivalent of this kind of person: Sure, everything looks great on the outside, but beneath the surface, there’s a whole lot of disorganization. Organizations need to make sure they don’t overlook the importance of inventory management.

To bolster the quality of inventory oversight, stores need to make sure they don’t overlook key elements of a great inventory strategy. Therefore, we’ve decided to highlight three inventory-related practices that can be easy for stores to overlook:

1. Keeping an ongoing record of inventory to ensure accuracy: 

As a retail operation, it can be tempting to only keep track of inventory at certain moments, such as when you’re receiving orders. And as Entrepreneur pointed out, stores that don’t harness a convenient means of data entry are also left with counting/tracking methods that are far too error-prone to be dependable. Solving these issues boils down to implementing a solution that makes inventory tracking both accurate and easy to carry out on a consistent basis. This is where handheld RFID devices like the Nedap !D Hand 2, TSL 1128, and Touch Technologies r-touch can make a big difference.

2. Paying careful attention to inventory tracking numbers: 

There are items in a store that sell out quickly, and then there are others that just don’t move as quickly. But for store leaders who don’t pay attention to inventory tracking data, these items might as well be the same. The problem is, they aren’t – and stores that aren’t able to prioritize inventory items are apt to always be running out of desirable merchandise while wasting money stocking products that customers simply aren’t buying. To prevent this problem from arising, stores need to implement RFID software, which can help to automate the process of inventory and assets tracking, thereby providing store leaders with actionable data about which products should take priority in terms of stocking.

3. Letting all staffers know about the inventory strategy:

While store managers may be the main employees handling inventory issues for your stores, that doesn’t mean the remainder of the staff should be left out of the conversation. Inventory management is the kind of thing that should be communicated across the board.

As inventory visibility leaders, CONTROLTEK offers businesses a host of products that can play a key role in bringing inventory management up to speed. While inventory is something that can be overlooked by store leaders, it’s also an element of store operations that is easy to have firm control over. From the RFID software we provide to our industry-leading fixed readers and USB readers, we have the tools to make sure your store is positioned to be the most profitable it can be by increasing sales and reducing shrink.

To find out more, contact CONTROLTEK today.

About CONTROLTEK

Since 1976, we have been delivering unique products and solutions to the cash-transfer and asset protection industries to address specific business challenges. Our company has grown steadily based on the quality of our products and the quality of our service. Our commitment to research and development is combined with a willingness to listen to the people who everyday depend on our products. By relentlessly researching and introducing new materials and new features, we are proud to say we have impacted the way assets are secured globally.

With experience gained through research and collaboration within the financial and retail sectors, we actively charted a course over the past several years to bring added value, new thinking and viable approaches, addressing the dilemmas and challenges that frustrate business professionals today.

During this process, we realigned our resources within CONTROLTEK, creating three silos (ISS, ISP and IVS). This enables us to focus more specifically on the needs of our Clients and their specific challenges they face on a daily basis. Additionally, CONTROLTEK has aligned itself with Global partners to provide holistic solutions that solve today’s challenges.   Whatever the application, CONTROLTEK resources stand by ready to deliver results that enable commerce and effectively secure assets at financial institutions and leading retailers across the globe.

Put the Stock Back in Out-of-Stocks: Affordable RFID Solutions

The movement of goods is the ultimate goal for any retailer. But what happens when a retailer is unable to move goods into the consumers’ hands because of out-of-stock issues?

According to Jacqueline Renfrow at fierceretail.com, over 75% of adults found a wanted product to be out-of-stock during store visits over the last 12 months. In the same period of time, 63% of online shoppers experienced the same out-of-stock error messages. Retailers lost 58% of these sales and 65% of the online sales.

New research from IHL Group attributed a $634.1 billion loss due to out-of-stocks. Greg Buzek, IHL Group President said, “Retailers can realize huge gains by addressing opportunities that are in hand and slipping through their enterprise fingers.”

Many factors can lead to embarrassing and costly out-of-stock scenarios for retailers, such as:

  • Underestimating the demand for a product
  • Miscalculating the time needed for the supplier to deliver the product
  • Late delivery by a supplier
  • Product quality issues
  • Shortage of working capital

Those who have been in business long enough know that some situations cannot be controlled. But what can be controlled, should be controlled. Inventory visibility is something retailers can control with confidence.

“The ability to sense and respond to demand through greater inventory visibility and intelligence is critical for retailers,” explains Bryan Nella, director of corporate communication at GT Nexus.

It is time to take control with ControlSpan, CONTROLTEK’s inventory visibility system (IVS). ControlSpan is true inventory visibility made easy. ControlSpan is a modular solution built to allow freedom of choice at the beginning of an RFID deployment, to grow with the demands of the organization, and provide options at all levels instead of being locked into a single, siloed offering.

The Proctor & Gamble Company sponsored a study, A Comprehensive Guide to Retail Out-of-Stock Reduction in the Fast-Moving Consumer Goods Industry, which discovered RFID showed great promise to solving the out-of-stock epidemic. The report states that “new retail support technologies, such as RFID, have changed our thinking about OOS as a single problem, to separating OOS examination to ‘not in the store’ and ‘not on the shelf’, which is key to truly understanding the out-of-stock epidemic.

Eric Green, CEO and Co-Founder at Askuity, attributes out-of-stocks due to poor data-syncing, accuracy failure of Perpetual Inventory (PI) systems, and distorted demand forecasting…flaws ControlSpan can resolve.

Bill Hardgrave, Dean of Auburn University’s Harbert School of Business and an expert on RFID adoption in retail, said the technology’s reliability and economic benefit have been well-established. Hardgrave adds, “RFID enables retailers to know what they have, and where they have it.”

Request a demo today and see how CONTROLTEK’s ControlSpan suite offers end-to-end inventory and process management solutions that allows not only improved visibility but also enhanced profitability and customized integration. CONTROLTEK’s solutions help make existing systems more efficient and accurate.

As any retailer would agree, inventory visibility is the cornerstone to meeting product demands and protecting the trust consumers place in the company brand.

Top 3 Reasons Why ORC may be Smaller Fish in the Shrink Sea

What is ORC?

The National Retail Federation (NRF) defines Organized Retail Crime (ORC) as, “theft/fraudulent activity conducted with the intent to convert illegally obtained merchandise, cargo, cash, or cash equivalent into financial gain (no personal use), typically through online or offline sales. Organized retail crime typically involves a criminal enterprise that organizes large-scale thefts from a number of retail stores and employs a fencing operation to sell the illegally-obtained goods for financial gain.”

ORC: The Smaller Fish in the Shrink Sea?

Shrink rates can be lowered by either decreasing the amount of inventory shortage or by increasing sales, The Calibration Group’s whitepaper, “SOH: The Retail Problem That’s 7 Times Greater than ORC” reveals. Accordingly, ORC may no longer be considered the biggest threat to retailers’ bottom lines from a Loss Prevention perspective. The Top 3 reasons to consider when pondering this comparison:

  1. ORC costs North American retailers a staggering $34.67 billion a year, but the $252.9 billion stock-on-hand (SOH) issue overshadows ORC by more than 7:1.
  2. If North American retailers eliminated ORC entirely, profit earned from the $34.67 billion in merchandise now available for sale would be $1.04 billion.*
  3. If North American retailers resolved their SOH issues and recouped the lost sales, the profit earned from the $252.9 billion would be nearly $7.6 billion.*

* Calculations based on 3% net profit margins

The Four-letter Solution

An inventory visibility system (IVS) with RFID technology offers retailers clear insight into their inventory at any given point in time. RFID, along with a comprehensive, yet simple software application, has now become the solution that can easily be embedded into any retail framework. An IVS system with RFID provides store personnel with key inventory management data, such as how many items are in back stock and on the sales floor, which in turn allows the staff to manage inventory more “real-time” by making necessary adjustments.

This technology also provides the ability to take a full inventory of the store within minutes as opposed to hours. Loss Prevention professionals can now enhance profitability more effectively by increasing sales while simultaneously lowering the shrink rate.